Other forms: simple interests
In order to borrow money from a bank, you have to pay a fee; when that fee is an annual percentage of the amount you originally borrowed, it's simple interest.
When you need 100 dollars to start your lemonade stand, you might ask your parents for a loan. If they suggest a five percent simple interest rate, that means if you haven't paid them back after a year, you owe them 105 dollars (what you borrowed plus five percent). After two years, you would owe 110 dollars, and so on. It's the most basic — or simple — kind of interest.